Institutional investors’ role in diversifying orientation decision across Tunisian companies

Figures & data

Table

Hypothesis (H1)	H1: The institutional investors’ control exercised on executives helps favorably influence the decision to diversify their activities
Hypothesis (H2)	24: A negative relationship persists between family ownership and the diversification decision

Table 1. Variables’ identification and measurements

Variables	Descriptions	Measurements
Endogenous variables
DIV	Diversification strategy	It consists in a binary variable that takes the value 1 if diversification proves to be high, and 0 if it is low
Exogenous variables
FAM	Family shareholder	This variable is measured by a dichotomous variable indicating either the presence of a family business, or not (respectively, 1 and 0)
INSTI	Institutional investors	This variable is measured by the proportion of shares held by institutional investors
Control variables
LEV	Leverage	This variable is measured through total debt to total assets ratio
SIZE	Company size	This variable is measured via the decimal logarithm of turnover
ROE	Performance	This variable is measured through net profit to equity ratio

Table 2. The applied sample analysis

Description
Initial BVMT sample for 2011	55
Financial firms excluded	−23
Other non-financial firms	113
Insufficient data to psychological characteristics	−27
Insufficient data to assets revaluation	−7
Final sample	111

Table 3. Descriptive statistics

Variables (N = 111)	Mean	Min	Median	Max	Std. Dev.
FAM	7.9838	0.000	0.000	0.000	18.95078
INSTI	18.2878	0.000	16.6200	34.570	19.26033

Table 4. The dependent and independent variables’ correlation coefficients

N = 11		INSTI	FAM	DEBT	LOGCA	ROE
INSTI	Pearson correlation	1
	Significance (bilateral)
FAM	Pearson correlation	−0.046	1
	Significance (bilateral)	0.629
LEV	Pearson correlation	0.081	−0.136	1
	Significance (bilateral)	0.396	0.154
SIZE	Pearson correlation	0.684**	−0.069	−0.262**	1
	Significance (bilateral)	0.000	0.469	0.005
ROE	Pearson correlation	−0.108	−0.031	−0.133	0.009	1
	Significance (bilateral)	0.257	0.745	0.163	0.822

* Correlation significance at the 0.05 level (bilateral).

** Correlation significance at the 0.01 level (bilateral).

Table 5. The model’s logistic regression results

N = 111	Dependent variable DIV
Independent variables	Coefficient a	Std. dev.	Wald	Sig.	R^2 of Nagelkerke	Test of specification
Constant	0.550	0.501	1.206	0.272	0.316	χ^2 = 30.025
INSTI	0.056	0.018	9.212	0.002		p = 0.000
FAM	−0.003	0.013	0.059	0.808
LEV	−0.950	0.491	3.740	0.053
SIZE	−0.417	0.664	0.395	0.530
ROE	−1.368	0.454	9.074	0.003